How an order book works in a scalar market.

An order book is the list of everyone waiting to trade and the price they will do it at. It decides what you pay to get in and what you keep on the way out.

What is an order book?

Two lists facing each other. Bids are people offering to buy, with the price they will pay. Asks are people offering to sell, with the price they want. Every row carries a size as well, which is how much they will trade at that price.

Bids, asks, and the gap

Illustrative. Bar length is how much is resting at each price.

What is the spread?

The gap between the best bid and the best ask. Buy right now and you pay the best ask. Sell right now and you take the best bid. The difference between them is what a round trip costs you before the market has moved at all.

A book with plenty of orders sitting close together has a narrow spread. A thin book has a wide one, and every trade through it costs more.

How does a scalar market use one book?

A scalar market lists one instrument for the whole question, so every view about where the number finishes meets in the same place. Someone who expects a high finish and someone who expects a low one are pricing the same token, which means they can trade with each other.

That is what keeps the book deep. Depth is not a feature the venue adds. It is what happens when the people who disagree are put in one room.

What happens when the book is split?

Bucket markets list a separate contract for each range, and each contract carries its own book. The traders do not multiply to match, so the same orders spread across more books and every one of them gets thinner. You see it as a wider spread on the bucket you wanted.

That trade off is the subject of scalar vs binary prediction markets, which covers what the split costs beyond the spread.

What to look at before you trade.

Check the spread and check the size sitting behind it. A tight quote on ten dollars of depth is not a tight market, it is a tight quote. The number that matters is what it costs to put on the size you actually want.

How pricing works on a live RAVA market is in market price and prices and exits.